Big Apple Passes B2 Heating Mandate

The New York City Council recently voted to pass air quality legislation that will require the use of heating oil containing two percent biodiesel beginning in October 2012. What does this mean to the biodiesel industry?

“To have New York choose to improve its air quality and the sustainability of its fuel by embracing biodiesel is a fantastic precedent for the industry,” says Shelby Neal, director of governmental affairs, National Biodiesel Board (NBB). “It is said that, ‘If you can make it in New York, you can make it anywhere.’ We believe that to be true.”

It will create an exciting new partnership between soybean growers, renewable fuel companies and the heating oil industry in New York City, adds John Maniscalco, CEO, New York Oil Heating Association (NYOHA). NYOHA played an important role in drafting the language of the legislation, which gives the biodiesel and home heating oil industries two years to ramp up infrastructure and get ready for supplying “the city that never sleeps.”

New York City could consume as much as 20 million gallons of biodiesel annually for all grades of #2, #4 and #6 heating oil purposes once the legislation takes effect, Maniscalco says. New York City and New York State producers will no doubt supply the bulk of the biodiesel, but Maniscalco expects that biodiesel will also be sourced from out of state. “The more supply, the better. I look forward to it,” he says.

“I would expect that the mandate will be met by both local and out-of-state producers,” NBB’s Neal says. “Currently, production capacity in the New York metro area is limited. However, we tend to see production increase where markets increase, so I would not be surprised to see that change in the future.”

At this point, there is no legislation for higher blends, but Maniscalco would eventually like to see blends of B10 up to B20 accepted. Given that New York has passed this legislation, could similar legislation be passed in other cities, especially in the Northeast? Maniscalco says such legislation may be enacted more on a statewide basis, explaining that Massachusetts, for one, has been looking closely at Bioheat policy.

“New York is unique in that it is larger [in population] than most U.S. states. For this reason, it can pass and implement regulatory policies that aren't possible or might not make as much sense for smaller municipalities,” Neal says. “I don't see the New York biodiesel mandate encouraging other cities to adopt biodiesel mandates so much as I see it encouraging other states to adopt such policies.”

In fact, eight states have introduced Bioheat mandates this year, Neal says. “Almost all of them start at B2 and increase to at least B5 over time. The Connecticut mandate, which passed this year, increases to B20 by 2020. Most states want to start small and then work up to larger volumes.”

Another note on the Big Apple. It consumes a lot of biodiesel for transportation purposes. NBB’s Neil knows of one New York City agency that is the nation's largest municipal user of biodiesel. “I would estimate that New York City currently uses at least two million gallons per year, and probably more. It has been a leader on environmental issues, generally, and biodiesel, in particular, for some time. We are proud to be a part of that legacy.”